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Why Paying Off The National Debt Won't Work.

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To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact. This interest portion appears to be paid off but is in reality merely shifted to others in the economy.* Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio. In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio. Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

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To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact. This interest portion appears to be paid off but is in reality merely shifted to others in the economy.* Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio. In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio. Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

Ive heard very little regarding Paying Off The National Debt, only cutting the deficit.

Very different things indeed.

Regards,

Paul.

Edited by Black Cloud

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Guest Steve Cook

I’ve heard very little regarding “Paying Off The National Debt”, only “cutting the deficit”.

Very different things indeed.

Regards,

Paul.

You've heard very little about paying the debt off because it can't be paid off

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I’ve heard very little regarding “Paying Off The National Debt”, only “cutting the deficit”.

Very different things indeed.

Regards,

Paul.

There's not enough money in the world to pay off the outstanding debt. Seems we need to make more new money.

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Guest Steve Cook

There's not enough money in the world to pay off the outstanding debt. Seems we need to make more new money.

Yes

However, the elephant in the room is the fact that the creation of new money via the lending of it into existence (or via the monetising of existing bad debt) is reliant on the expectation of perpetual future growth to soak all of that new money up and give it a legitimate home. If there is no new economic growth, then we end up with too much money in an economic environment that has no place for it. This causes one of two outcomes:

1) The new money is taken back out of the economy via tax rises/cuts in state spending resulting in an acceleration to the bottom

2) We end up with some kind of re-run of the Wiemar republic

Both of the above two outcomes are fraught with dangers for the state. The first is likely to result in civil unrest almost immediately. The second is likely to result in civil unrest a little later down the line. The main advantage to the second option. though, for those who have no debt's and are asset rich is that their relative wealth is preserved whilst the rest of the population who are holding cash or debt are forced to take the full losses in the form of debasement of the currency and higher interest payments on debt.

If you were in a position of power and influence and were asset rich with few debts, which option would you push for?

One way or another, the majority of humanity is going to get a lot poorer. The losses cannot be avoided. The only debates left are how the losses are going to be allocated across humanity and what form those losses take. Will it be a poverty of empty pockets or one of pockets bulging with pieces of worthless paper?

Edited by Steve Cook

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The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

yup. Which means that the income flow due to interest needs to be reverse for a while.

That is, negative nominal interest rates. In a credit economy, there is no real reason why the floor on interest rates is at zero. no reason at all.

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yup. Which means that the income flow due to interest needs to be reverse for a while.

That is, negative nominal interest rates. In a credit economy, there is no real reason why the floor on interest rates is at zero. no reason at all.

Sure there is.

It's called a safe.

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To put it simply within a debt based monetary system (97% of it is debt based) if you attempt to pay off the debt you decrease the money supply by an equivalent amount, while leaving the interest portion of the debt intact. This interest portion appears to be paid off but is in reality merely shifted to others in the economy.* Thus paying off the national debt infact increases the overall uk debt burden to gdp ratio. In the past when the uk has attempted to pay of its debt what it has done in reality is shifted the debt to others while using economic growth to take care of the problem, lessening that debt to gdp ratio. Now however we are reaching the maltusian limits to growth meaning that within the next few decades and quite likely within the next few years the system will collapse under its own weight.

The media and government, and many here, have got it completely wrong. The idea of paying off the national debt under the current system is a smokescreen. What is desperately needed is not for the debt to be paid off, but the implentation of a monetary system that does not have a basis on debt and its continued expansion through economic growth.

*This is a direct result of how when a loan is made only the principal is created the interest must come from more loans made in the future.

What do you mean by "... we are reaching the maltusian [sic] limits to growth..." ?

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....but if we all take our money out of the banks and put it in a safe (because of negative interest rates) won't that just make matters worse?

We don't need to pay off the national debt. We just need to stop it getting any bigger. What's it at now +£10billion a month?

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Guest Steve Cook

What do you mean by "... we are reaching the maltusian [sic] limits to growth..." ?

Too many people...not enough stuff

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The money supply is just a means to an end, if all the debt gets paid off and people don't need money anymore then it's a job well done.

Imagine this scenario, Jeff needs a car but he cannot afford to purchase one outright, so he borrows some money and purchases his car from Pete. Pete then uses the cash and buys the equilalent amount of cheese from Jeff, all the money disappears because everybody has what they need.

When people need more debt/cash the whole process starts again.

The reason the debt cannot be paid off is because of simple, normal boring reasons, out gov't is corrupt and they don't give a damn about the economy or the future generations that will have to pick up the tab.

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Too many people...not enough stuff

The common misconception by malthusians is that people consume too many resources so that we'll eventually run out. What they fail to realise is that people are a resource, Labour us an essential factor of production. So instead of consuming more resources more people actually mean more resources as well as a greater capacity to produce.

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Guest Steve Cook

The money supply is just a means to an end, if all the debt gets paid off and people don't need money anymore then it's a job well done.

Imagine this scenario, Jeff needs a car but he cannot afford to purchase one outright, so he borrows some money and purchases his car from Pete. Pete then uses the cash and buys the equilalent amount of cheese from Jeff, all the money disappears because everybody has what they need.

When people need more debt/cash the whole process starts again.

The reason the debt cannot be paid off is because of simple, normal boring reasons, out gov't is corrupt and they don't give a damn about the economy or the future generations that will have to pick up the tab.

What you say would only be true if the money being lent did not have interest payments. In other words, if it was just existing capital reallocation within an economy. However, the requirement of interest means that there is a need for more money than existed previous to the loan being created.

This above only be squared by the creation of even more money in the form of even newer loans in a giant ponzi scheme that results in collapse for one of two reasons. Either the rate of creation of new debt based money exceeds the capacity of the economy to grow fast enough to soak it up and so we get a temporary collapse until the capacity for economic growth catches up. Or, the economy runs out of space/resources to grow at all, in which case the collapse is total, irreversible and as inevitable as night follows day.

We've just hit the second of these two scenarios.

Edited by Steve Cook

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Guest Steve Cook

The common misconception by malthusians is that people consume too many resources so that we'll eventually run out. What they fail to realise is that people are a resource, Labour us an essential factor of production. So instead of consuming more resources more people actually mean more resources as well as a greater capacity to produce.

What are people made of?

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The money supply is just a means to an end, if all the debt gets paid off and people don't need money anymore then it's a job well done.

Imagine this scenario, Jeff needs a car but he cannot afford to purchase one outright, so he borrows some money and purchases his car from Pete. Pete then uses the cash and buys the equilalent amount of cheese from Jeff, all the money disappears because everybody has what they need.

When people need more debt/cash the whole process starts again.

The reason the debt cannot be paid off is because of simple, normal boring reasons, out gov't is corrupt and they don't give a damn about the economy or the future generations that will have to pick up the tab.

What about the interest on Jeffs loan? Jeff has to pay back 104% to the bank to pay off his debt + interest. Where will that come from? Jeff owes it and Pete is skint. There's only one place it can come from and that's the bank. Ever wondered why the banks give out such massive bonuses. It's because if they didn't give it away then the economy would grind to a halt as they would have all the money. Trouble was they didn't want to give it away for nothing so they lent it with interest to our government. Retards.

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What you say would only be true if the money being lent did not have interest payments. In other words, if it was just existing capital reallocation within an economy. However, the requirement of interest means that there is a need for more money than existed previous to the loan being created.

This above only be squared by the creation of even more money in the form of even newer loans in a giant ponzi scheme that results in collapse for one of two reasons. Either the rate of creation of new debt based money exceeds the capacity of the economy to grow fast enough to soak it up and so we get a temporary collapse until the capacity for economic growth catches up. Or, the economy runs out of space/resources to grow at all, in which case the collapse is total, irreversible and as inevitable as night follows day.

We've just hit the second of these two scenarios.

It's possible to pay a £110 debt with only £100 cash in the economy. The only thing you need is time, time for the creditor to spend some money back into the economy so that it can be recirculated until the debt is paid off.

The crash you talk about is just a common housing bust, the only difference this time is that we've entered a period of global convergence so that our economies are booming and busting at the same time. Maybe the boom has been to big this time, but one thing for sure is that a lack of resources hasn't caused all this.

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What about the interest on Jeffs loan? Jeff has to pay back 104% to the bank to pay off his debt + interest. Where will that come from? Jeff owes it and Pete is skint. There's only one place it can come from and that's the bank. Ever wondered why the banks give out such massive bonuses. It's because if they didn't give it away then the economy would grind to a halt as they would have all the money. Trouble was they didn't want to give it away for nothing so they lent it with interest to our government. Retards.

Banks leak money all over the place, they pay taxes, wages rents, dividends, people default on loans etc etc.

There's a hundred ways for the money to find it's way back into the hands of the debtor, all they've got to do is work for it.

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Guest Steve Cook

It's possible to pay a £110 debt with only £100 cash in the economy. The only thing you need is time, time for the creditor to spend some money back into the economy so that it can be recirculated until the debt is paid off.

The crash you talk about is just a common housing bust, the only difference this time is that we've entered a period of global convergence so that our economies are booming and busting at the same time. Maybe the boom has been to big this time, but one thing for sure is that a lack of resources hasn't caused all this.

So, I take it you reckon that if oil had been $30 per barrel in 2007 instead of $150 our global economy would have collapsed just the same do you?.... :lol:

Edited by Steve Cook

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So, I take it you reckon that if oil had been $30 per barrel in 2007 instead of $150 our global economy would have collapsed just the same do you?.... :lol:

A brief drop in living standards won't crash an economy, at the most it's a slight inconvenience.

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Guest Steve Cook

A brief drop in living standards won't crash an economy, at the most it's a slight inconvenience.

Answer the question directly if you please...

Are you seriously suggesting that the global economy would have collapsed just the same in 2007 if oil had been at $30 per barrel instead of the $150 it was at the time everything went tits up?

Yes or no

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Answer the question directly if you please...

Are you seriously suggesting that the global economy would have collapsed just the same in 2007 if oil had been at $30 per barrel instead of the $150 it was at the time everything went tits up?

Yes or no

Yep things would be exactly the same because of the debt associated with the housing market.

I think you over emphasise the importance of oil, it's only a part of the total cost of production. So if oil temporarily shoots up by x% it doesn't mean that everything else immediately follows suit, and this brief bubble proved it. Prices in the shops didn't go up 500% overnight.

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Guest Steve Cook

Yep things would be exactly the same because of the debt associated with the housing market.

I think you over emphasise the importance of oil, it's only a part of the total cost of production. So if oil temporarily shoots up by x% it doesn't mean that everything else immediately follows suit, and this brief bubble proved it. Prices in the shops didn't go up 500% overnight.

rightyho... :lol:

I think we're done here

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You seem unclear in your thinking here.

Do you think that there is not a problem looming or do you think that there is a problem looming but there is nothing to be done so eat, drink and be merry for tomorrow....?

You're going to be waiting a long time if you're expecting to see a hydrocarbon led world apocalyspe. We may have a world financial collpase on our hands, but it's got nothing to do with oil production. As a race we've taken on more debt than it was possible to service and rather than face this head on our respective gov'ts instead pretend it's not happening.

We just need a few people to lose some money, have a bit of a recession and then we can get back to the business of growth again. But we need to get out of this denial stage first.

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Yep things would be exactly the same because of the debt associated with the housing market.

I think you over emphasise the importance of oil, it's only a part of the total cost of production. So if oil temporarily shoots up by x% it doesn't mean that everything else immediately follows suit, and this brief bubble proved it. Prices in the shops didn't go up 500% overnight.

The main problem is that the deficit difference between fiscal inequality and monetary imbalance

is greater than the wealth creation of loans but less than the borrowed equivalent of interest

repayment, hence financing a fiat currency creates instability between commodity value and wage

inflation.

Hope that makes it all clear.

PN

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The main problem is that the deficit difference between fiscal inequality and monetary imbalance

is greater than the wealth creation of loans but less than the borrowed equivalent of interest

repayment, hence financing a fiat currency creates instability between commodity value and wage

inflation.

Hope that makes it all clear.

PN

It just looks like you've got a bunch of economic words together and thrown them haphazardly into a sentence.

If anyone knows what you mean by this I'd be surprised.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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